To read this content please select one of the options below:

Does personality drive price bubbles?

Andreas Oehler (Chair of Finance, Otto-Friedrich-University Bamberg, Bamberg, Germany)
Florian Wedlich (Department of Finance, Otto-Friedrich-University Bamberg, Bamberg, Germany)
Stefan Wendt (Reykjavik University, Reykjavik, Iceland)
Matthias Horn (Department of Finance, Otto-Friedrich-University Bamberg, Bamberg, Germany)

Studies in Economics and Finance

ISSN: 1086-7376

Article publication date: 27 June 2019

Issue publication date: 27 July 2021




The purpose of this study is to analyze whether differences in market-wide levels of investor personality influence experimental asset market outcomes in terms of limit orders, price levels and price bubbles.


Investor personality is determined by a questionnaire. These data are combined with data from 17 experimental asset markets. Two approaches are used to estimate market-wide levels of investor personality. First, the market-wide average of each personality trait is determined; second, the percentage of individuals with comparable personality in a market is computed. Overall, 364 undergraduate business students participated in the questionnaire and the experimental asset markets.


Limits and transaction prices are higher in markets with higher mean values in participants’ extraversion and openness to experience and lower mean values in participants’ agreeableness and neuroticism. In markets with lower mean values of subjects’ openness to experiences more overpriced transactions are observed. In markets with a higher proportion of extraverted subjects and a lower proportion of neurotic subjects higher limits and transaction prices are observed. Bubble phases last longer in markets with a higher proportion of extraverted and a lower proportion of neurotic subjects.


Overall, the findings suggest that market-wide personality levels influence market outcomes. As a consequence, market-wide levels of personality help to explain prices in auctions with limited number of participants. Additionally, studies that analyze the influence of subjects’ characteristics, including risk aversion, emotional states or overconfidence, on market outcomes should also consider personality traits as potential underlying factor.



The authors would like to thank Benjamin Hartl, Tim A. Herberger, Gulnur Muradoglu, Hersh Shefrin, Stefan Zeisberger, Jonathan Fluharty (discussant), Gesa-Kristina Petersen (discussant), Tristan Roger (discussant), Tong Zhou (discussant), participants of the 52nd Annual Eastern Finance Association Meeting, the 78th Annual Meeting of the German Academic Association for Business Research, the 14th HVB Doctoral Students Seminar, the 2016 Behavioural Finance Working Group Conference, the 23rd Annual Conference of the Multinational Finance Society, the 2nd Research in Behavioral Finance Conference, the 2016 Academy of Financial Services Annual Meeting, the 2016 FMA Annual Meeting and seminar participants at Bamberg University, Germany for helpful comments and suggestions. They further thank Sebastian Hilker and Robert Stein for technical support. All remaining errors are their own.


Oehler, A., Wedlich, F., Wendt, S. and Horn, M. (2021), "Does personality drive price bubbles?", Studies in Economics and Finance, Vol. 38 No. 3, pp. 619-639.



Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

Related articles